On July 24, 2015, the U.S. Court of Appeals for the District of Columbia Circuit reversed the dismissal of two challenges to the constitutionality of the Consumer Financial Protection Bureau (CFPB) and the recess appointment of its director, Richard Cordray. The D.C. Circuit remanded both to the District Court for consideration on the merits.

In 2013, the U.S. District Court for the District of Columbia dismissed both challenges after finding Appellant State National Bank lacked standing, and neither claim was ripe. In its first challenge, the bank attacked the constitutionality of the CFPB by arguing Congress's broad delegation of authority to the bureau violated the non-delegation principle. The bank also argued that an independent federal agency may not operate under a single director, as opposed to having multiple members. In its second challenge, the bank challenged the constitutionality of President Obama's recess appointment of Director Cordray during a three-day intra-session Senate recess in 2012. Appellant argued that both his appointment, and all actions taken by Director Cordray prior to his confirmation in 2013, were unlawful.

The D.C. Circuit reversed the District Court and found that the bank had standing to make both challenges. The D.C. Circuit reasoned that a regulated entity automatically has standing to challenge an allegedly illegal statute or rule under which it is regulated. The court pointed out that regulated entities necessarily incur costs as a result of new regulatory obligations, as well as efforts to ensure compliance. The court also found both claims to be ripe, announcing that "it would make little sense to force a regulated entity to violate a law… simply so that the regulated entity can challenge the constitutionality of the regulating agency."

The D.C. Circuit affirmed the District Court's dismissal of Appellants' two other claims for lack of standing. First, the D.C. Circuit agreed that the bank did not have standing to challenge the Financial Stability Oversight Council, another entity created by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The D.C. Circuit applied the same standing doctrine, but this time finding the bank lacked standing as an entity not regulated by the Council. The D.C. Circuit found too attenuated the bank's argument that it had "competitor standing," rejecting the idea that greater regulations on competitors lends a reputational benefit to those regulated competitors. Similarly, the D.C. Circuit held that states attempting to challenge the new liquidation authority given to the federal government by Dodd-Frank lacked standing: Their claims were premature given the uncertainty of future regulation and lack of injury demonstrated.

Without speaking to the merits of each remanded challenge, the D.C. Circuit directed the District Court to reconsider each claim. The D.C. Circuit specifically reserved for the District Court the question of the significance of Director Cordray's later Senate confirmation and his subsequent ratification of the actions he had taken while serving under a recess appointment. The D.C. Circuit also noted that the states could bring their claims in the future should they be injured by the government's use of the liquidation authority at issue.

State Nat. Bank of Big Spring v. Lew, Case No. 13-5247 (D.C. Cir. July 24, 2015)